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15 June, 2015

Japan’s Environment Ministry Opposes New Coal-fired Power Plants

On June 12, Japan's Ministry of the Environment (MOE) announced that it would advise the Ministry of Economy, Trade and Industry (METI) of its opposition to the planned construction of large coal-fired power plants in Ube City, Yamaguchi Prefecture, on account of their hefty CO2 emissions.

The opinion will be reflected in the plants’ environmental impact assessment that the ministry is now preparing.

Earlier this month, the Japanese government announced its target of reducing the country’s greenhouse gas emissions by 26% by the year 2030 from their 2013 levels. Nonetheless, quite a few operators nationwide have recently announced plans to build inexpensive coal-fired power plants.

Fearing that a continuation of the situation could make it impossible for the country to reach the new target, the MOE has strongly urged the electric utility industry to develop an industry-wide framework for reducing CO2.

Although the MOE opinion has no legally binding effect — only METI has the power to approve and grant permission in such cases — it will be interesting to see how METI reacts to it.

The new thermal power plants are being planned by the Yamaguchi-Ube Power Generation Co., Ltd., a joint venture of the Electric Power Development Co. (EPDC, or J-Power), Osaka Gas and Ube Industries, Ltd. The company plans to start constructing two 600-MWe class coal-fired power plants in 2017, with the first one slated to begin commercial operation in 2023.

As coal-fired power plants are generally believed to emit relatively large amounts of CO2, the Japanese government did not use to approve the construction of new ones in principle because of environmental impact assessments. That situation changed, however, with the nuclear accident at the Fukushima Daiichi following the giant earthquake of March 11, 2011.

With an uncertain schedule for the restart of domestic nuclear power plants — now all shut down — many power companies and other companies in Japan have been announcing new plans to construct coal-fired power plants, which are generally cheaper than other kinds of thermal plants.

Fueling the boom in building coal-fired power plants is also the fact that the country will fully deregulate retail power rates as of April 2016. As consumers will then be free to choose which power company to buy their electricity from, the companies have employed a strategy of seeking low-cost, coal-fired power to maintain price competitiveness.

The result, of course, will be that homes and businesses will pay lower rates, although CO2 emissions will necessarily rise as well.

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